Wyoming Proposes Bill To Allow Tesla-Like Direct Sales For All Automakers

10 months ago by Steven Loveday 32

Tesla may be making some headway in its direct sales battle

Tesla may be making some headway in its direct sales battle

Wyoming is one among several states that doesn’t allow Tesla to sell its cars to consumers, due to the company’s direct sales model. A bill has been proposed to put a change to this. Wyoming Senator, Cale Case, explained:

tesla-model-s-showrrom-store-dealer-boutique

Typical Tesla Showroom

“Right now, a manufacturer cannot legally sell cars to Wyoming consumers in Wyoming. I am not sure what Tesla would do with the law, but it seems like a business-friendly thing to do to make it legal for them to sell cars to people in Wyoming.”

Senate Bill 57 will apply to any automaker that would like to sell its vehicles directly, without the use of a franchised dealership. Tesla will still have to get a license, but then the company will be able to open its own stores and sell on its own.

Currently, Wyoming residents have to travel to Colorado if they want to purchase a Tesla vehicle. Interested Tesla consumers in Utah, North Carolina, Connecticut, Michigan, and a few others states have to purchase their vehicles out of state as well. Tesla is currently in court over the issue in several states.

Tesla is unique to other automakers, since the company only makes electric vehicles. In fact, Tesla is the leading electric car maker on the planet. The traditional, age-old franchise dealership model does not work for a company like Tesla, for a myriad of reasons.

Unfortunately (but expectedly), the Wyoming Automobile Dealers Association (WADA) is involved and looking over the proposed bill. The organization is working to figure out whether it believes that the new bill is fair, and that no harm will be done to existing dealerships. WADA VP, Marsha Allen, isn’t concerned that people can’t purchase Tesla vehicles in Wyoming. Her justification is that people are already purchasing them from other states and it is not illegal to own and register a Tesla in Wyoming. Apparently, no harm inconveniencing people as long as franchise dealerships aren’t affected.

Tesla already has many Superchargers in the state of Wyoming, but no showrooms or service centers. In some other states, like Michigan, Tesla has opened showrooms even though the representatives are not allowed to sell the vehicles. They can simply show the cars and provide information, and then must send the interested parties to the website or to another state. Test drives are also not permitted, and Tesla reps can’t mention pricing.

Source: Teslarati

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32 responses to "Wyoming Proposes Bill To Allow Tesla-Like Direct Sales For All Automakers"

  1. Someone out there says:

    Would it not be easier to just remove the bill that prevents direct sales?

    1. Angel Klanchar says:

      I suspect that the existing bill also includes the necessary protection of existing dealerships. They can’t make it ok for a manufacturer to open a dealership right next their existing franchised dealership,

      1. Pushmi-Pullyu says:

        Right. The simplest thing would be to merely amend the current law with an additional provision, something like:

        “This law shall apply only to automobile manufacturers which have franchised dealerships in the State of Wyoming.”

        Unfortunately, partisan politics and lobbying pressures being what they are, it’s all too rare for any law to be passed which is simple, clear, and lacking in loopholes.

  2. Eco says:

    If they don’t embrace new technology, auto dealerships will soon go the way of the Dodo Bird.

    1. Joe says:

      They’re almost there already.

      1. jimjonjack&jill says:

        And never too soon! These Self Serving Pompasses !

      2. Pushmi-Pullyu says:

        Yes. The reason that the various State Automobile Dealers Associations are trying so hard to keep Tesla from getting unrestricted sales is that they perceive Tesla as an existential threat to the entire dealership model.

        And I think they’re right. If Tesla Motors is able to ramp up sales to the level they plan for the Model ≡ (~400,000 per year or more) without resorting to traditional dealerships, then that will make it very clear that the dealership business model is obsolete, and should rapidly disappear.

        A lot of naysayers predict that Tesla will have to fall back on the traditional franchised dealership business model to ramp up sales. Personally, I question that’s true. If Apple Computers and Amazon.com managed to ramp up to a high volume of sales with no franchised stores, why can’t Tesla?

        1. Stimpacker says:

          If the politicians truly want what’s best for the state, they should realize nothing actually chamges.

          1. There will still be a physical store. No loss of jobs.

          2. There will still be a physical service center. No loss of jobs.

          3. Better to let in-state sales for tax revenue.

          Only difference is where political financing comes from.

          1. wavelet says:

            Not really.
            If the “direct” model didn’t result in lower overhead costs (difference between what the end-customer pays and what the manufacturer receives as revenue), why would Tesla be interested in it? It does require a lot less, and the reason is a lot less people employed in selling and to a lesser extent servicing (and car dealerships also like servicing because it’s an opportunity to discuss trade-ins, buying accessories etc.)

            In the age of the Web, there is really no justification most intermediary-type professions: Travel agents, realtors etc.: Their major function is information brokers, and information is usually available for free. Car salespeople aren’t different.

        2. theflew says:

          Let’s be honest this really has little to do with Tesla. Tesla is a really small fish at this point. But it has started done a slippery slope that could let traditional automakers sell directly. That’s what the auto dealers association is worried about. GM on the other hand wants a level playing field. Either everyone has to have dealers or not.

          Personally I can’t see Tesla in the long run without dealers. Direct sales and support gets complicated when your talking about 400k+/year.

  3. DJ says:

    Good for Wyoming.

  4. Anthony says:

    Wyoming also introduced a bill that makes large scale green energy illegal for utilities to use to power Its customers. So not all is well in Wyoming.

    1. CLIVE says:

      Wow how sad is that.

      1. jimjonjack&jill says:

        What You Really mean is ., How Corrupt is That!!!!

    2. Nix says:

      Sadly, despite having one of the lowest population densities in the United States, Wyoming actually needs clean energy in order to solve their growing air pollution problems.

      Like these examples:

      “cancer agent “sulfuric acid mist” emissions were 250 percent of the maximum allowable limit at its Naughton coal-fired power plant”

      http://www.wyofile.com/blog/wyoming-is-stepping-up-enforcement-on-energy-industries/

      “Sinclair Oil Corp. violated air pollution limits established in a 2008 consent decree at refineries in Casper and Sinclair, Wyoming, releasing excessive amounts of nitrogen oxides, sulfur dioxide and particulate matter into the air.”

      They are actually still burning fuel oil at that refinery too in order to generate electricity to run the refinery.

      http://ens-newswire.com/2012/08/27/sinclair-oil-to-pay-14-million-for-wyoming-air-pollution/

  5. Angel Klanchar says:

    Good for Wyoming! Just did my first roadtrip to Wyoming this summer. Was surprised to see sever al Tesla’s there, especially when I learned that some are having to drive 4-500 miles if they need a service. What dedication.

  6. Rightofthepeople says:

    WHOA WHOA WHOA! Wait just a minute here. You mean to tell me that a REPUBLICAN State Senator in an extremely RED state is putting forth a bill that will, gasp, help Tesla? Something doesn’t compute, because I am constantly reading comments on this site about how backward all Republicans are and how red states do everything they can to hurt Tesla and the EV revolution.

    OK, my snarky rant aside, this just goes to show you that you should not paint ANY group with a broad brush. And on a more serious note, I sincerely hope this passes and spreads like wildfire to every other state. If dealerships provide value and great service, then they will survive. If on the other hand they need a law to protect them from competition, then they don’t deserve to survive.

    1. PsychicTuesday says:

      I don’t disagree, but Republican lawmakers tied to the fossil fuel and car dealership lobbies have sought to damage Tesla for some time. It wasn’t just the politics of lobbying, it was opposition to an American success story they feared a Democratic administration could claim credit for contributing to. Google ‘Tesla’ and ‘Solyndra’ and see who those trying to erroneously compare the two were — for years.

      So it’s not fair, but neither is trying to kill a company for politics and then embracing it after you’ve failed. The stereotype of Republican lawmakers, in this case, is there for a reason.

      1. Joe says:

        Forget the party affiliation, ‘R’s and ‘D’s don’t mean anything any more. I’ve seen both fight hard for oil and anything else that makes them money.

        Dealership aren’t as strong as they were three decades ago when Porsche tried to open factory stores. Most people hate the dealership experience and the dealers only have themselves to blame.

        1. Rightofthepeople says:

          You hit the nail on the head Joe. No need to use the D or R label here, you can simply say “politicians” with ties to big oil have done XYZ things to hurt Tesla, hurt EVs, hurt the free market etc. We can quibble about whether a higher percentage of Ds or Rs have done XYZ, but it’s politicians of all stripes we should be watching closely.

    2. JakeY says:

      I don’t believe anyone said all republican politicians are anti-EV, just a vast majority are.

      1. Rightofthepeople says:

        I dunno Jake, I’m pretty sure if we scour all the comments of this site we could find at least one that says all Republicans are anti-EV, racist, bigoted, homophobic, islamaphobic, zenophobic, all around nasty people who want to pollute the air and water and kill grandma and grandpa.

        But, I’ll grant you that most liberal types don’t feel that way and wouldn’t say those things. I would refute your position that “the vast majority” of Republicans are anti-EV. Of course we would have to define what you mean by vast majority; are you talking 55% or 95%?

        I personally think most of my social peers, many of whom are conservative Republicans, could give two rat poops about EVs. They aren’t anti-EV or pro-EV, they are simply ignorant regarding EVs. No data to back up my claim here, just my own opinion.

        1. jimjonjack&jill says:

          This Phobia thing is blown out of proportion ..Just another way to shut people Up & take away their Constitutional Rights..

    3. Pushmi-Pullyu says:

      “I sincerely hope this passes and spreads like wildfire to every other state.”

      Well of course so do I, and I suspect that every regular reader of InsideEVs does, with the exception of a fortunately few (but persistent) serial EV bashers.

      However, those who are not familiar with American demographics should be aware that Wyoming is one of the most sparsely settled States, with few automobile dealerships. Therefore, the lobbying power of WADA is rather less than it is in more populous States. A win for Tesla in Wyoming might not be the harbinger of a national trend, much as we’d like it to be.

  7. Michael says:

    Wyoming has the most screwed up approach to renewable energy that I’ve ever seen. On one hand, they open the door to Tesla and potentially encourage other electric vehicle sales. Then they slam the door on charging them with clean renewable energy by imposing massive taxes on utility wind and solar? Forcing people to run their EV’s on coal?

  8. Vexar says:

    Every time you buy anything from a dealership, you give them money/power. Support independent shops, buy through group buy discounts/fleet sales, but stop putting your quarters into this incessant game. Want the new GM Bolt? Awesome. Find a way to buy it sans dealership, or buy something else. When you walk in, knowing infinitely more about EVs than the chain-smoking, sun-burnt slick-meister, why are you keeping that person employed?
    I wish dealerships were universally seen as being as relevant as a travel agent.

  9. Pushmi-Pullyu says:

    “Unfortunately (but expectedly), the Wyoming Automobile Dealers Association (WADA) is involved and looking over the proposed bill. The organization is working to figure out whether it believes that the new bill is fair…”

    LOL!

    I *cough* believe *cough* that I already know what they will conclude…

    We will find out just how much lobbying power the Wyoming Automobile Dealers Association (WADA) has. Hopefully not much!

    Go Tesla!

  10. no comment says:

    in writing the statement: “the traditional, age-old franchise dealership model does not work for a company like Tesla, for a myriad of reasons”; shows a substantial misunderstanding of the nature of automobiles. electric vehicles are not computers, they are primarily mechanical in nature. mechanical stuff goes wrong on them.

    one of the issues with selling cars is that you not only have to *sell* the car, but you also have to make provisions to *service* the car. the question is whether you believe that an auto manufacturer can maintain a nationwide sales and service network.

    to replicate a dealer network would require massive cash outlay from an auto manufacturer. even if you believe that stuff goes wrong less often, you still have to maintain the network so that it is available when stuff does go wrong.

    in most states, an auto manufacturer can already sell direct. if direct selling were really such a great idea for large volume auto sales, you’ve got to wonder why other auto makers aren’t doing so. it appears to work for tesla now because: 1)they are a niche auto manufacturer; and 2)there is a certain “cult” aspect to buyers of tesla cars who are willing to accept inconveniences that would be unacceptable from a major auto manufacturer.

    1. MaartenV-nl says:

      You seem a bit confused.

      The function of a traditional dealership is twofold, selling cars and servicing cars. For clarity reasons let us talk about service centers and carshops.

      Tesla works already with certified private service centers. There are not many of them, because the market is small and the requirements from Tesla to become certified are high. But the lack of independent service centers is commercial, not principal. To make sure there are enough qualified service centers, they exploit their own service centers unless for some reason local regulations forbid this.

      Car shops have to get people to buy a car. This sounds simple, and it is. But selling a car at a classic dealership is a completely different process from selling a Tesla.

      The first obstacle is the sales model. Tesla uses the build to order sales model while the rest of the North American car industry uses the build to stock sales model. For a production constrained carmaker like Tesla the build to order sales model fits the needs of its customers far better than the build to stock model. And it saves several thousand dollars from the sales process, that is a win-win.

      The second obstacle is the way to get a prospect to buy a car and become a customer. The classic products are well known and understood. The task of the salesperson is to persuade the prospect to buy his offering. But a Tesla sells itself after a prospect has all his or her questions about batteries and range and charging and all the other unknowns and doubts answered. The Tesla salesperson should not try to sell a car, but make sure the prospect feels welcome and free to ask all the silly questions it has in its head. The task is to make visiting the Teslashop fun and visit again, preferably with someone else who has a lot of questions and can be turned in a prospect and later a customer. After a prospect has all its questions answered, it can configure and order its new car on-line. The prospect can do this from home or at the Teslashop with the assistance from the salesperson.

      This sales process is highly effective but badly suited for independent dealerships. Why should they spent hours on educating a prospect to see the prospect go home to order on-line?

      The last leg of the sales process is delivering the product to the customer. Tesla does home deliveries throughout the United States, no need for dealerships here.

      Tesla has implemented this sales model successfully in all the places it does business worldwide. Why doubt that they can do this also in the few states where the local dealer associations have succeeded in barring Tesla from getting a sales permit? Now that is a crazy thought.

      1. no comment says:

        maybe you live in europe and don’t know how things work in the US. i do live in the US and i can tell you without hesitation that, even when compared to mercedes-benz, the tesla distribution structure is woefully inadequate in my state.

        in terms of what you refer to as “the sales model”, build to stock is a matter of convenience; it allows consumers to walk onto a lot and take delivery on the same day or within a few days. if a consumer didn’t like any of the cars on the dealer lot, the consumer *could* have a car built to order. the disadvantages in doing “build to order” are that it would take longer to get the car. in addition, the dealer would be more likely to give you a discount to take a car off the lot, where he is more likely to charge you full MSRP if you want a car built to order. the reason why you would get a better deal on the car on the dealer lot is because the dealer has cash tied up in maintaining inventory on the lot, and he wants to get his cash back.

        the sales cycle that you describe is that sales cycle for a niche product. i fully agree that tesla is a niche product. the general public in the US does not do extensive research into automotive technology when purchasing a car, they rely on what the salesperson says to make a decision (that is true for a wide range of consumer purchases in the US), and they “shop around” to hear different sales pitches.

        as a niche product, even the current tesla distribution network is adequate. but tesla has aspirations for larger scale sales and production. the problem is that the current tesla business model doesn’t scale well to large scale production.

    2. Pushmi-Pullyu says:

      “if direct selling were really such a great idea for large volume auto sales, you’ve got to wonder why other auto makers aren’t doing so.”

      But I don’t have to wonder. I’ve read enough about the history of auto dealerships to understand that it’s an economic system which arose due to control of information by the auto maker. The average consumer couldn’t know what the true cost of an automobile was, and thus the dealer had the upper hand in negotiating a selling price.

      But in the Information Age, anyone can look that info up on the Internet, and anyone could in theory use the Internet to place an order directly with the auto maker without needing to pay a middle man. The dealership model is a dinosaur which is almost certainly doomed to extinction, and probably fairly soon.

      One of the reasons Tesla has been able to succeed despite the uphill battle of competing with long-established American auto makers, is because cutting out the middleman of the dealership has allowed Tesla to lower the price that customers have to pay. If you look at it from that perspective, then you have to wonder just why Tesla would ever be crazy enough to saddle themselves with the dead weight of traditional dealership franchise middleman. And that’s why I’ve become increasingly convinced that Tesla will never, ever adopt that business model, no matter how many people insist that Tesla will have to.

      1. EndResult says:

        What evidence is there that the direct sales model has resulted in lower pricing? I am highly confident that management at Tesla spent a lot of time figuring out exactly how much money they could ask for.

        You may not like dealers because you do not like to negotiate, but there is no difference between the dealer and Tesla when it comes to them getting as deep into your pocket as they can at the time of sale.